The days of promise and prosperity are dwindling for ethanol plants around the country. Once a thriving enterprise backed by government subsidies and mandates is now struggling to keep up with a decrease demand in gasoline thus a decreased demand for ethanol. Roughly 10 percent of the nations ethanol plants have stopped production in the last year. What was once a clever alternative to rising gas princes is now a failing industry.
Due to the recent drought it pushed commodity prices so high it made ethanol to expensive to produce. This paired with a dip in the production of gasoline have driven the ethanol market downward. This has left the ethanol world hanging in the balance. MAny barrels lay untouched in ethanol factories' warehouses because there is not enough gasoline to mix with the ethanol. This hurts two groups of people. It effects the people who live in the communities that were formed around the ethanol plants. With plants shutting down people lose their source of income as well as their sense of community. This also affects farmers who rely on ethanol as a secondary market for their crops.
The ethanol market has fallen from 9.7 million barrels production per year to 8.5 million barrels per year and there is no sign of slowing these receding numbers. Some cars run on flex fuel which is ethanol gasoline but the problem is the E85 gas is not offered everywhere and it is not much cheaper than regular gasoline. I have a feeling the future of ethanol will not be so bright. Especially with increasing alternatives to gasoline such as an increased production of electric cars. I believe ethanol is a dying market.
I think ethanol was never a long term alternative to gasoline because it relied so much on the gasoline market. It is only a matter of time until we begin to use a different energy source than gasoline, and as the gasoline market dies so will the ethanol market.
ReplyDeleteAt first the ethanol market was a huge breakthrough but a steve said it depends so much on the gasoline market. The article states that there wasn't a dip in production of gasoline but rather the consumption. With less consumption of gasoline there was no need for the abundant amount of ethanol being produced so many plants needed to shut down. Also the gasoline market fell from 9.7 million barrels per day to 8.5 million per day not the ethanol market. This same consumption decrease has caused ethanol to be less needed. Ethanol has many factors that will have a huge impact on its future.
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